Home sales in the London and St. Thomas, Ont., real estate market remain significantly lower compared with a year ago, as higher interest rates put continued pressure on people’s purchasing power, the London and St. Thomas Association of Realtors (LSTAR) said Tuesday.
New figures released by the agency show just 451 residential properties were sold in the region in November, a drop of 10.5 per cent from October and 44 per cent from a year ago, with residential transactions at their lowest point in the last decade.
Of those, 336 were single-family homes, 64 were condo townhouses and 36 were apartments.
There were at least 875 new listings and 1,497 active listings in the region in November, a dip from the 975 new listings and 1,620 active listings reported in October.
Last month’s figures are still well above 2021 numbers, however, when 825 new listings and 379 active listings were recorded.
Properties are spending a median of 25 days on the market, up from 23 in October, eight in November 2021 and nine in November 2020.
Home prices have continued to fall as well from their February peak to $615,247 in November, a dip of around $25,300 from October and down nearly $59,000 from a year ago. Prices, however, are still about $79,000 higher than they were in November 2020.
In London proper, the average stood at $611,343, while in St. Thomas the average was $515,180. Prices in the region remain highest in Middlesex County, with an average sale price of $886,979, a dip of only six per cent from last year.
The MLS HPI Benchmark Price for the region, meanwhile, stood at $575,500 last month, a decrease of $8,700 from October and $58,200 a year ago, but still $78,850 higher than November 2020.
In a statement, LSTAR’s 2022 president, Randy Pawlowski, said the local real estate market has been impacted by interest rate hikes from the Bank of Canada, which has intensified buyer reluctance and weakened people’s purchasing power, he said.
The central bank began raising interest rates in March, when it delivered the first of six consecutive rate hikes. It’s expected to raise its key interest rate target again on Wednesday as it continues to try and bring inflation back to its goal of two per cent.
“In the last two years, the local housing market’s frenzy was artificially fueled by the socio-economic climate of the pandemic. Now, that the socio-economic conditions are completely different, the local housing market is in correction mode,” Pawlowski said in a statement.
With the decline in transactions comes sustained higher levels of inventory compared with the last two years. As of November, the region had 3.3 months’ worth of inventory, up from 3.2 in October, 0.5 in November 2021 and 0.7 in November 2020.
“The housing demand is still high in our area, and with the increased levels of inventory, local buyers have now more choices and time to shop for new homes,” Pawlowski said.
“However, the uncertain economic conditions are keeping many prospective Buyers on the side line.”
— with files from The Canadian Press